It is undisputed that British Columbia is in a housing crisis. Prices are at all time highs, and vacancy rates hover around 0% in urban centres. To solve our crisis, we need to focus on the supply side of the equation. Yet, BC Assessment and the Province encourage landowners to limit the supply of housing and promote the hoarding of under-utilized land by way of the Section 19(8) exemption.
BC Assessment and local government play a role in helping incentivizing re-development of properties by way of taxation. Over time, the higher re-development potential of a parcel will substantially increase its value, and hence the tax burden on the property owner.
- a house located on land that is zoned for, or that has been rezoned for, commercial use (e.g., allowing for a store or office building);
- a house located on a four acre parcel which could be developed into one-quarter acre lots;
- a single family dwelling in an area zoned for multi-family dwellings (i.e. bungalow in the west end of Vancouver).
At some point, the tax burden will become so high, that continuing with the properties current use becomes economically irrational.
This intended function of BC Assessment and municipal taxes ultimately helps land parcels reach its goal of providing a built landscape that reflects the needs of its community. Yet, the government has created a loophole to ‘protect’ long term homeowners in a neighbourhood of change.
Both Vancouver and Victoria are geographically limited in the supply of land. Yet, we see many parcels of land that are situated in prime locations that are vacant, contain single family housing, or are generally not serving their highest and best use. Sometimes, these properties are already zoned for higher density or for a mixed use residential/commercial. Other times, the property may have not have the zoning, but an official community plan (OCP) designation that would support a higher density / higher use re-development.
BC Assessment takes into account local government visions (OCP), rezonings, re-development, and market demand in its annual appraisals of property. If an OCP is adopted or updated, BC Assessment reviews market evidence to determine any impact on the market value of affected properties.
Under-utilized properties are to be assessed at market value based on the redevelopment potential of the land. The improvement value (value of the physical structure on the land, if any) would be nominal based on the current, interim use, pending redevelopment.
Section 19(8) limits the supply of housing
The BC Assessment Act allows for residential land that is ripe for redevelopment to be assessed at less than market value. If the owner qualifies for section 19(8) the property will be valued on its current use. Effectively mitigating any pressure to release or redevelopment of the land to its highest and best use.
The land parcel must meet ALL of these requirements;
- The parcel must be residential class
- Lot size must be 2.03 hectares (~5 acres) or smaller
- The land must have redevelopment value that would be higher than the properties existing residential value.
- Current improvements must not accommodate more than three families (triplex, congregate, row housing)
The owner must meet ALL of these requirements;
- owned the property continuously for the past 10 years; and
- occupied the property as principal residence continuously for 10 years
It is clear this government exemption is designed to protect long term home owners who refuse to realize the extraordinary gain in market value. However, in a province where housing need is so dire and in short supply these exemptions only amplify the affordability crisis to protect the very few.
List of Section 19(8) properties in Victoria
- 1037 Fenn Avenue, Saanich
- 4171 Cedar Hill Road, Saanich
- 322 Plaskett Place, Esquimalt
- 5575 Parker Avenue, Saanich
- 140 Government Street, Victoria
In Vancouver, there are nearly 500 homes that are utilizing Section 19(8).
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